Introduction: 1. The World's Librarians
"Good luck. I've been trying to do that for some years." -- Google CEO Eric Schmidt after being told the title of this book.
The world's first great library was the Great Library of Alexandria. It was created by Ptolemy I, a childhood friend of Alexander the Great and a general in his army. Ptolemy inherited rule of Egypt--which the army had conquered--after Alexander's death in 323 B.C. Ptolemy made the small, backwater town at the mouth of the Nile, named after the great conqueror, his new capital. By creating the library, somewhere around 300 B.C., he turned his city into a thriving center of intellectial thought envied by the world. It reigned as the greatest library in the world for three hundred yeats.
Ptolemy's goal was to collect all the written works in the world and put them in one place. By the time the library was destroyed, it was said to contain more than five hundred thousand papyrus scrolls, collected over 300 years. The library played a critical role in the Hellenistic Age, the period during which Greek culture spread into much of civilized Europe, Africa and Asia. Probably no other library had had such influence on cultures and knowledge--until the great library of the Internet was created more than two thousand years later.
The Internet's librarians sit today in a tidy campuslike business complex in Mountain View, California, the epicenter of Silicon Valley. It's a campus of modern steel, concrete and glass structures interlaced with trees, gardens, walkways and artificial ponds and streams, where people travel by bicycle, by scooter, and foot among--or inside--the buildings. These librarians are a universe away from the gray-haired ladies with glasses dangling from chains around their necks and an incredible knowledge of the Dewey Decimal system of many childhood memories. This is, after all, the electronics age.
Google Inc., a thriving corporation teeming with youthful and smart computer scientists and an incredible knowledge of the Internet, has become the defacto head librarian of the world's information; the entity that guides us through the labyrinthine web of online information, philosophy, entertainment, opinion, debate, slander, pornography, art, and worthless blather that the geeks and executives of the Internet like to lump into the single category of "content."
Larry Page and Sergey Brin did not create the Internet (although they now employ one of its key architects, Vint Cerf.) But if anybody embodies the soul of the world's head librarian, it's the brainy pair of Larry and Sergey. They created the heart of Google's philosophy, its business tactics, and the ethos behind all major issues--from censorship to user privacy to entering new markets and trying to change the business tactics of existing corporations.
They're unlikely business moguls. Larry is th emore socially awkward of the pair. Heavily eyebrowed, thick-lipped, with a perpetual five o'clock shadow and conservatively cut black hair usually in need of a comb, he rarely volunteers to answer questions unless specifically asked to address them. When he does, it's with a methodical intonation that sounds like a baritone version of Kermit the Frog. Sergey is also shy with outsiders, but more poised, with a piercing stare and curly brown hair piled on top of his head, unable to settle down. They work together on all major company decisions, from ethical issues to product design -- the latter in meetings that can be brutally taxing. But Larry, as president of Products, is the primary thinker about the company, and weighs in heavily on key hiring decisions. Sergey, a mathematical wizard and president of Technology, is the arbiter of Google's technological approach and shows deep interest in the company's moral stance.
Facing questions from shareholders and the press at a corporate annual meeting a couple years ago, Larry sat stiffly in his chair, straight-backed in a blue dress shirt and brown slacks, his hands on his knees, one of them holding a microphone as if he didn't know quite what to do with it. Sergey was more relaxed in a brown T-shirt and faded jeans. He sat comfortably with his forearms resting on his legs, looking over the crowd with an air of intelligent and confident interest, more willing to address sensitive topics than one would expect from such an intensely private entrepreneur.
At this meeting, Amnesty International had presented two proposals, demanding that the company set up a human rights committee to examine its practices in China, with the aim of limiting censorship there. Management felt that this was already being done, and rejected the proposal. But in a show of solidarity with those who have concerns about the issue, Sergey decided to abstain from voting with his shares, neither agreeing nor disagreeing with it. True, it was a largely empty gesture, since the board and management had plenty of votes to reject it even without him, but he wanted to demonstrate an acknowledgment of the difficulty of the issue. Larry and CEO Schmidt voted against the proposal.
I asked Sergey why he abstained, and he explained that he was sumpathetic to the cause and agreed with the proposal in spirit. "Directionally, the two proposals are correct," he said. "I think there is certainly room for us to have a group of independent people in Google who meet regularly to discuss these questions." But he also said he was proud of Google's actions in China, where he felt the company's record was better than that of its competitors.
China is just one of many issues that have focused the spotlight on Google's ethical stance since the company was founded in late 1998 by these two Stanford University computer science graduate students. Google came out of a project that only a computer scientist could love: developing technology to search through large electronic databases of published research papers. Instead, they came upon a much greater solution--a better way to search through the giant morass of data that is the Internet--and ended up turning their technology into one of the biggest, most influential companies in technology today.
But technology alone does not make a successful company. Business tactics do. Larry and Sergey have created a unique company with a new kind of business model, employing tactics that fit the Internet Age like Alexandria's Great Library fit the Hellenistic Age. Google may not last three hundred years, but it still has a huge future in which its influence will continue to grow.
To say Larry and Sergey struck the right business chord would be the understatement of the twenty-first century. When they launched Google, the were entering a war that pundits were insisting they had already lost before they even got started. In mid-1998, it was Yahoo Inc. that sat on top of the world Wide Web. Yahoo had become one of the premiere Internet sites, the place where 75 percent of Web searches were begun. More than twenty-five million people visited Yahoo every month. In September 1998, it became one of the first pure Internet companies to claim a profit.
The previous March, Fortune magazine had summed up the prevalent view: "Yahoo! has won the search-engine wars and is poised for much bigger things," its editors declared. Its stock was soaring past $100 per share, on its way to a peak of $230 at the end of 1999.
Then it all fell apart. By mid-2000, Yahoo's stock was in free fall, on its way to hitting the bottom at under $5 a share. Yahoo CEO Tim Koogle, once hailed as a great Internet visionary, was a year from being fired. Nobody seemed to know what hit them. Whatever it was, it missed Google.
What happened was that the world changed, literally overnight. Before December 31, 1999, Y2K paranoia was scaring corporations worldwide into pouring billions of dollars into new computers and software, fearful that their old computers would crash when their internal clocks changed from "99" to the year "00". With all that spending, technology companies were growing fat, and their stock prices were growing fatter. A robust market for technology stocks inspired venture capitalists to pour money into dot-com companies and take them public on nothing but a business plan and a prayer. Day traders followed their lead and bid up the dot-com stocks. The stock market was soaring so high that the Federal Reserve tried to cool irrational exuberance by raising interest rates.
Every one of those moves turned out to be wrong. On January 1, the Y2K panic proved to be unfounded and the money tap that fed Silicon Valley was shut off. All at once, corporations stopped buying computers. Profits at technology companies plunged, their stock prices were sucked down with their declining earnings, and high interest rates made it worse. The unprofitable dot-com companies saw their stock prices drop to pennies a share, and venture capitalists stopped investing. The real Y2K disaster turned out not to be crashing computers, but a crashing Internet market, triggered by the end of the Y2K fear-induced spending.
But there was one standout. As the cash flow that had kept the technology world afloat reversed direction, Google seemed to catch the runoff.
In January of 1999, the Google search engine was handling ten thousand search queries a day.
A year later, this had grown to ten million per day. Google took in revenues of $200,000 in 1999.
In 2000, the start of the technology recession, its sales grew by 940 percent, to $19 million.
By the end of 2002, when most dot-com companies were either desperately dehydrated or dead, Google's revenues had bloated to $440 million.
In 2003, just four years old, its sales hit $1.5 billion, its profit was $100 million, and it had taken over some 80 percent of the world's search queries.
[To be continued...]